Archive for month: April, 2012

Ask WHY a lot more than HOW.

Here are six questions, in the order you should ask them, that will help you start, grow and build your business. The most important ones are the ones you ask least often.

90% of the answer is asking the right question. Are you asking the right questions? In the right order?

Successful business owners ask Who, What, Where, When, Why and How, much differently than reporters use them. TIMING (asking at the right stages) is very important, and the FOCUS of the question is, too.

Here’s the order in which you should ask them as you start, grow and build your business:

WHY – the most important, least asked question (in both the long and short term). Why are you doing this? What is the end game? If you don’t know why you are in business (it’s not the money, it’s never the money), or why you are buying that copier (“it’s shiny” is the wrong answer) you are done from the start. Everything starts and ends with WHY. Ask it EVERYTIME you ask one of the other questions if you want to be successful.

WHAT – the favorite question of the “craftsperson” – the easiest question to get lost in. We’re taught to ask this question first – “What am I selling?”. If you answer WHY first, you’re much more likely to come up with the right WHAT to sell. Know WHY, then ask WHAT.

WHO – Once you know WHY you are in business, and WHAT you are selling,
a) WHO is your target market (hint: it’s not everyone who can fog a mirror)?
b) WHO will work with you? (they don’t have to all be employees).
c) WHO will you buy supplies from?
The best answer to all of these is whoever will provide the lowest maintenance, highest profit culture for you. Ask WHO long before you actually need any of these people – it’s a culture question and if you don’t have a great grasp on WHO before you need them, you’ll hire for skills. Never hire for skills, only for culture.

WHERE – Has multiple long-term and short-term uses, but is rarely used well. Answer it after WHY, WHAT and WHO.
a) “Location” WHERE – used to get a lease
b) “Marketing” WHERE – Know WHO, than ask WHERE to find them? Make it about a) demographics, b) associations, c) strategic alliances, d) cohort groups (similar demographics). The best “Marketing WHERE”? – WHERE do most of your future clients come from? Invest there!
c) “Direction” WHERE – closely related to “WHY” (knowing WHY informs WHERE you are going. Knowing WHERE you are going only helps if you put a date on WHEN you will be there. WHEREAREYOUGOING?? (WHY?) Extremely Important.
d) “Sane Assessment” WHERE – Do you know clearly where you are right now? a) Strengths/Challenges b) decision-making skills c) leadership style d) business strengths/challenges (market, product, revenue, profit, cashflow).

WHEN – one of the least asked, best questions. We don’t like WHEN because it holds us accountable to do something, which is why we should fall in love with it. Just like with WHY, ask WHEN every time you ask another question, and employ the Three-Step Decision-Making Process:
a) Make a decision (that is not a decision yet)
b) Put a date on it (when)
c) Go public – declare the date and ask someone to support you getting there.

HOW – the worst, most asked question in business planning. HOW is a buzz-kill; it focuses on the fear of the POSSIBLE, not the PROBABLE. It will uncover 127 things that COULD go wrong (possible) without telling you which four of the 127 WILL actually go wrong (probable). It also gets us involved in all kinds of nonsensical preventative planning for things that will never happen while we ignore the four things that are already a problem. HOW is paralyzing unless it is always used in conjunction with MOVEMENT and the other five questions. There are two uses of HOW, one bad, one good:
a) “Long-term HOW” – you should almost never use HOW to answer a long-term question, such as “How do we get all the way from where we are to where we want to be three years from now?” That’s fortune telling and voodoo. Business planners love this question, but no question is of lower value than “long-term HOW”.
b) “Short-term HOW” – this is actually a great question – “How do I get from where I am to the next step?”, because you are asking it about current realities that actually need a HOW to solve them. Use HOW for short-term implementation, not for long-range planning.

WHY, then WHEN; rarely HOW.
Ask WHY first. Always. Then get used to asking WHY and WHEN with every one of the other questions. Only ask HOW when addressing the next few steps. Never ask it about the distant future.

If you get in the habit of asking WHY and WHEN with every question, and asking HOW only about the next few steps, you’re much less likely to run into problems, and much more likely to build a great business.

Which one of these questions do you need to focus on right now in order to build your business? WHY? And WHEN will you act on it?

/wp-content/uploads/2016/11/logo-2.png00chuckblakeman/wp-content/uploads/2016/11/logo-2.pngchuckblakeman2012-04-27 04:40:182016-01-15 20:02:29People who ask HOW work for people who ask WHY

Grab and hold – woof.

Last week we talked about how to start a business. Growing one is a different ball game.

The #1 indicator of success in early stage business is “Speed of Execution”. Get moving. (See last week’s post.)

But the #1 indicator of success in growing a successful sustainable business that makes money while you’re on vacation is quite different. Speed of Execution is still important and always will be – always keep moving. But in the daily grind of building a business, “be the bull dog” becomes the main attribute of success. Never giving up, staying in the game. What fancy people call “Time in Market”. What I call “Being Relentless”.

Being Relentless
The bull dog was bred to help butchers bring down bulls that were essentially wild after years of living on the range. Their job was to grab the nose or face and not let go under any circumstance – no matter what. A couple of them would bring the bull to its knees with their weight essentially attached to its head, and the butcher could rush in and do his job. Bull dogs were trained to not let go or the butcher could die. That’s why we call people “bull dogs” – for their relentless focus and commitment to attach themselves to something no matter what – never letting go. Relentless.

Ships, Bridges and Parachutes
There are a lot of mechanics to building a business. None of them matter if you do not plan to be relentless and never let go. Too many business owners go into business with an escape route in place.

In the 1500s Cortez scuttled his ships to let his men know they weren’t going back – Mexico was their new home. To build and grow a business, we need to sink our ships, burn our bridges and shred our parachutes. If we have one eye on where we’ve come from and one on where we’re going we won’t have the focus, commitment and relentlessness we need to be successful. Having a foot in two worlds is dooming us to failure because when (not if) things get hard, we will take the parachute, run back across the bridge or take the next ship out. It’s human nature.

Trapeze Moments and Turtles
Ray Kroc said, “If you don’t want to take a risk, get the hell out of business.” I would add that if you don’t want to let go of the trapeze you have a death grip on, don’t pretend you want to get to the next one. Growing a business is full of trapeze moments where the only way to get where we want to go is do a full release of the present AND the past, and to hurdle ourselves toward the next thing.

But most of the time it’s the tortoise that is our best model of success. The tortoise beats the hare not because the tortoise is faster or smarter, but because the hare gets distracted with shiny objects and interesting diversions masquerading as new initiatives when the original initiative has no momentum of its own.

We kill our businesses more often by simply moving on to the next great thing before the first great thing is on auto-pilot. Sadly it’s most often simply because we got bored with the first shiny object. You can’t afford to get bored – that’s what children do. Be singular in your focus. Go after the nose of your business like a bull dog, grab it and don’t let go until you’ve wrestled it to it’s knees.

Lack of Vision = Tired
Or we get tired. You can’t afford to get tired, and if you have an utterly clear view of where you are going, you won’t. People with a clear vision for the future are motivated enough to get through the bumps and bruises and tired days. Be relentless.

I’m not smart. I’m just relentless. Being Relentless is the #1 indicator of success in the long haul of building a business, especially when combined with Speed of Execution.

Of course it’s hard. Of course money is tight. Of course you have too much on your plate. Of course nothing is going right. If you know where you are going and have a clear grasp on your Big Why, you’ll push through all that.

No Escape Hatch
Sink the ships. Burn the bridges. Shred the parachutes. If you’re not all in you’ve already built in all the excuses you need for quitting. If you’ve made that commitment, be relentless. Never give up. The smartest person doesn’t win. the fastest person doesn’t win. The biggest person doesn’t win. The last guy standing wins.

Sure, go ahead and be smart, fast and big if you need to. But do all of that with a focus on just one thing:

Being Relentless. After Speed of Execution gets you started, it’s the #1 indicator of success in growing a business that will make money while you’re on vacation.

Are you the bull dog? Do you have relentless focus and commitment to attach yourself to your business and not let go?

Be Relentless.

/wp-content/uploads/2016/11/logo-2.png00chuckblakeman/wp-content/uploads/2016/11/logo-2.pngchuckblakeman2012-04-14 04:40:202016-01-15 20:02:29How to Grow a Business

Don’t follow MBA, SBA or SCORE advice.

The SBA’s SCORE site had a “how to start a business” blog recently, but the traditional MBA-style advice is too “ivory tower” to work. It’s both much simpler and a little harder than they make it sound.

The SCORE blog post says figure out 1)what you’ll do 2)who your competition is 3)your overhead 4)how much money you can make 5)your potential profits, and 6)your funding. If you follow these six steps, you’re almost certainly going to fail.

It’s well-meaning advice, but doesn’t reflect how it really works. I’ve started and grown seven businesses, two that are international and made enough mistakes to figure out some basics. Here’s how I would start a business:

1) Take your product or service to market, put a high price on it (it’s always easier to come down than go up) and see if someone will buy it. If this doesn’t work, don’t do any of the other steps above – they are a waste of time if you aren’t already selling something. And if it does work, most of the other steps above will force themselves on you at the appropriate time.

Finding someone to buy your product or service is the first and only thing you should do before you do anything else. It should have been #1 on the SCORE list.

2) DON’T do a business plan (steps 1-6 in the SCORE blog) – they are nonsense and fortune-telling, and they keep you from going out and trying to sell your product to see if you have something viable. They also make you think you know what you’re doing, which keeps you from seeing great opportunities and obstacles. And they uncover 127 things that COULD go wrong (not WILL go wrong), which causes you to spend precious time and resources mitigating things that will never happen, and paralyzing you with all the bad things that might happen if you go into business.

The second worst thing you can do starting a business is to do a business plan. The absolute worst thing you can do is follow it. Check out the story of Webvan – a $2billion startup that is the classic case of a company that built an incredibly elegant business plan with brilliant management, then followed it right off the end of the earth (and they didn’t do #1 above until they were $1 billion in debt). Do a 2-Page Strategic Plan instead.

3) Figure out your profit margins. How? See #1 above – sell something at as high a price as you can – well above your minimum margin. Again, you can always come down. I worked with one client whose product cost $.35 all in (including marketing). They made a few of them, put it on the market for $8.50 and it didn’t sell. Over a period of a couple months they got the price down to two for $6.50 and they sold like hotcakes. Once they knew that their margins were huge, they had real data to determine their profitability. Do not determine your profitability in the ivory tower of a business plan – it’s voodoo.

4) Never take outside money unless there is no other way. 84% of the Fortune 500 companies never took VC or other early stage funding. It’s a myth that you need money to grow your business. VCs want you to believe it’s a must because they want to grow your business REALLYFAST so they can sell it out from under you and run off with cash. They’re building cash cows, not businesses.

5) Do NOT figure out your competition. You don’t have any competition except your own head. Do NOT look at what other people are doing to find out how to be successful. If you don’t have enough creativity and uniqueness to enter the market without looking at what others are doing, you shouldn’t be in business. See my blog titled Your Competition, Isn’t.

Doing it Wrong and Fixing the Process
I worked with a business owner recently who made the mistake of consulting with SCORE and doing everything they recommended. He had 80+ products defined and produced, a warehouse, financing, a great retail location, and $250,000 in inventory. When he finally started taking his products to market, the market wanted them packaged in entirely different ways and amounts and at different price points, and about 70 of his products were not selling.

We recommended he dump the warehouse, the retail shop and 75 of his products, and get on an airplane to major retailers, get their feedback, and learn his “business plan” in the trenches. With this approach his overhead is nearly gone, and he is now making money and profit. He would have been out of business in six months the other way. He can build all that other stuff after he makes some money.

How to Start a Business – redux; Sell Something.
Real businesses do not start with thinking, planning, researching, compiling, statistical analysis, building a “great” product in a lab, marketing, vetting your competition, estimating your overhead or finding a possible funding source.

Real businesses don’t start that way – not HP, Apple, Honest Tea, Google, 37Signals, Facebook, a plumber, or just about any other real business you can name. Read Bill Hewlett’s quote under HP’s Early Days here – he went and sold something (a few really stupid things) – this is how you start a business.

Go sell something. If it doesn’t sell, do what Hewlett and Packard did, sell something else. Don’t do anything else first. Once you have something that sells, your “business plan” will unfold in front of you in real time, in the real world. It’s counter-intuitive and doesn’t follow the mantra of the MBAs or the SBA/SCORE who think you should get it all figured out ahead of time, but it’s the way real businesses are successful.

Stop planning – get selling (quickly and inexpensively, on a very small scale).

/wp-content/uploads/2016/11/logo-2.png00chuckblakeman/wp-content/uploads/2016/11/logo-2.pngchuckblakeman2012-04-09 04:40:222016-01-15 20:02:29How to Start a Business

The tortoise wins.

I ran a marathon 30 years ago. While training, my wife, Diane, started casually jogging with me at the end or beginning of my runs. A few weeks before the marathon she ran a half-marathon with me.

Since I had never run more than three miles, I had a five month schedule for preparing for the marathon. I was very disciplined about it, it didn’t matter if it was late at night or raining, I kept to my schedule for those five months and finished my marathon.

20 years later I was only running casually one or twice a week, sometimes less. I was able to keep my exercise going with other sports, but really didn’t have a long term commitment to running. 20 years after the marathon Diane was running four to five times a week faithfully, every week.

Discipline vs. Diligence
I had been DISCIPLINED to prepare for the marathon for five months, but Diane was DILIGENT to keep running a few miles every day, year after year. We hear a lot of talk about discipline, but diligence trumps discipline every time, and is much more desirable in growing a business that lasts.

Tony Robbins says we over estimate what we can do in a month, and greatly underestimate what we can do in a year. Diligence takes the long haul into account and sets us up for long term success. It’s about being the tortoise, not the hare. Diligence keeps us from getting distracted by each new shiny object.

Discipline is about building a habit. Diligence is about building and sustaining a life and a legacy.

Discipline is about WHAT WE DO. Diligence is about WHO WE ARE.

Things are great; things are not great; things are great…
Why are there so many peaks and valleys in businesses? Too often it’s caused by being too committed to very short term impact (discipline) and not having a good grasp on how to do anything about the long term (diligence).

The priority – the long term
Henry David Thoreau said “Most men lead lives of quiet desperation.” In business, we get a shot at quiet desperation every time we commit to a short term shiny object that we just got excited about. Emotion and shiny objects are a great for recipe for short term shooting stars, but diligence keeps us grounded, stable, shooting for something significant with our business.

Short term goals that aren’t connected to any significant future for our business contribute to quiet desperation – moving from one short term, random, unconnected objective to another. We can look very disciplined about short term goals and never get anywhere. Longer term objectives for our business get us focused on something significant and create quiet resolve.

Investor owned and publicly traded businesses rarely get the opportunity to actually build a business on what would be good for the long term. As a privately owned business, you have the ability to build something that will make an impact for decades to come and create a great legacy by simply being diligent to make decisions that are best for your future, not just your present.